Record Labels Claim Limewire Liable For $75 Trillion in Damages

It's been nearly a decade since the music industry declared war against file sharers via its controversial policy of suing individuals supposedly identified via their IP addresses. After all this time one would expect the various companies to present a consistent, united front. As a recent court filing against Limewire shows this is absolutely not the case. Last May, federal district court judge Kimba Wood granted the record industry's request for a summary judgement against Limewire. With their winning ticket in hand, the RIAA withdrew to contemplate the level of statutory and punitive damages it felt Limewire should pay. The recording studios have never been overly interested in due diligence or common sense but this latest tops all.

Limewire, the plaintiffs allege, owes them between $400 billion and 75 trillion. The latter, written out, comes to 75,000,000,000,000.

Everyone, meet Jeeves.
When not starring in Tarzan movies or enjoying the finer things in life, he moonlights as an account for the music industry.

We decided to graph a handful of additional values to put the $75 trillion in context. World GDP for 2011 is expected to be ~$65 trillion, the US national debt is currently $14.25 trillion, and the total median income for all 114,825,428 US households in 2010 is just $5.7 trillion. In other words, every single US household would have to spend all of its income buying nothing but music for over 13 years in order to arrive at what the music industry has deemed a reasonable settlement. Even the lower figure of $400 billion still amounts to seven percent of total household income in the entire country.

The legal question at the center of these absurdly high judgements is whether or not the plaintiffs can demand statutory damages from each individual infringement. A simple example is as follows: Assume that the record industry is able to recover $10 in statutory damages each time Song XYZ is shared. If 10,000 people download Song XYZ, Limewire is on the hook for $100,000 in statutory damages from just one song. If Limewire had a library of 100 songs, each of which is downloaded by 10,000 people, it'd be on the hook for $10 million.

The alternative reading is that the plaintiffs are only eligible to recover statutory damages based on the number of songs shared. If Limeware shared 100 songs, as above, it would be required to pay damages of $10 per song or $1000 total. The enormous gap between these two figures is a genuine problem for modern copyright law. Judge Wood writes: "To the best of this Court's knowledge, the issue of whether a plaintiff should be able to recover from a secondarily liable defendant multiple awards per work based on the number of direct infringers... has never been addressed in a context where the secondarily liable defendant has enabled hundreds, if not thousands, of individuals to infringe."

Having acknowledged the problem, she rules that the plaintiffs are only eligible to recover a single statutory reward per work infringed. One of the strongest arguments against the claim that Limewire owes up to $75 trillion is that it violates the judicial precept of absurdity. In arguing that Limewire should be eligible for damages on every individual download, the studios were effectively arguing that Limewire owed it more money than the entire record industry has made since Edison invented the phonograph in 1877.

This decision is important because it both acknowledges a legitimate gap in copyright law while slapping down the recording industry's blatant stupidity. It's incredibly ironic that the music studios, who unquestionably have the most to gain from balanced copyright law that addresses digital media while maintaining fair use, instead paint themselves in motley. Even if Wood had agreed with their logic, no higher court would have allowed a $400 billion fine to stand against one company. Ridiculous moves like this leave us wondering how sincere the music industry is when it speaks of finding common ground.